Modern marketing teams can collaborate with hundreds of freelancers, influencers, and content creators across various campaigns and channels, finance leaders supporting these efforts have been challenged to support the speed required by the business. We met with Nick Wagner, a finance leader in the entertainment industry with VP roles at Warner Music Group and most recently WME to get a first hand perspective of how teams are adjusting. Throughout this article we highlight Nick's perspective on the challenges he has come across in his career and how to overcome them.

Nick emphasizes the importance of finance teams acting as business enablers while following necessary procedures and controls:

"My focus over the last 5 years or so has really been about how we best support the business and help them achieve their business targets and goals. Sure, my job is to run FP&A and make sure finance procedures and controls are followed, but at the end of the day, I believe Finance needs to be a business enabler. What I think about is how Finance can improve our processes so that the business can move at their speed in order to meet or exceed their targets."

This perspective highlights the need for finance teams to understand the unique requirements of marketing operations and work towards increasing efficiency and driving business results. However, many organizations still rely on traditional procure-to-pay solutions that were designed for a different era of business. Legacy systems are inadequate for the fast-paced, high-volume nature of modern marketing programs.

Traditional procure-to-pay solutions, such as enterprise resource planning (ERP) systems like SAP and Oracle, business spend management (BSM) platforms like Coupa and Ariba, and  accounts payable (AP) automation tools like Tipalti and BILL, were primarily developed to handle large-scale, infrequent B2B transactions between buyers and established suppliers.  While these systems excel at managing complex supplier relationships and high-value purchases, they often falter when tasked with the diverse, frequent, and time-sensitive payments characteristic of today's marketing ecosystem.

The disconnect between these traditional solutions and the needs of modern marketing teams leads to a host of challenges. Marketing departments find themselves bogged down in administrative tasks, playing games of telephone to help with vendor setup and check on payment statuses, struggling with delayed payments, and facing difficulties in maintaining positive relationships with their partners. Meanwhile, finance teams grapple with inefficiencies, compliance risks, repetitive tasks of setting up vendor after vendor, and manual entry errors - e.g. incorrectly entering a general ledger code, or miscoding an accrual which results in incorrect reconciliation along with incorrect reporting which results in issues related to visibility of marketing spend.

Nick shared a real life story to bring to life the real world implications of this disconnect:

“I’m on vacation (which didn’t happen often enough) and I get a phone call from somebody on the team, saying Nick, I'm sorry to bother you on your vacation. We have a risk to our $3 million campaign, it’s held up because a creator who is critical to this campaign hasn't been paid their upfront fee yet. We were supposed to pay them 50% upfront, and that payment never went out. The campaign was a tight timeline with a two week turnaround and the creator won’t start work until getting paid.

So I had to call the Global SVP of Procurement and ask why they had not been paid, and that this potential error is causing a large deal to be put at risk of being lost. They investigate and get back to me: given the number of approvals and the complexity of the overall procure to pay process, the team in India did not approve the invoice to be paid. But because of human error the team in India never flagged the non approval to anyone on my team, which didn’t allow anyone to rectify the issue until it became a larger problem.

The process clearly has its flaws, forcing us to scramble for a same-day wire transfer, which incurs additional costs. Coordinating multiple people and departments to pay out a single payment wastes even more time and money of those involved. In terms of time alone, it likely costs us more than the $1,500 we paid out, not including other team members. Where's the value in handling this manually? Too much of the team’s time is spent managing angry creators who hold back content because they haven't been paid on time. This disrupts our business and our teams. It's an ineffective, non-value-add use of our energy every single day."

To truly understand why traditional procure-to-pay solutions are failing modern marketing teams, we need to delve deeper into the specific pain points and limitations of these systems. By examining the unique requirements of marketing operations and contrasting them with the capabilities of legacy payment solutions, we can illuminate the pressing need for a more tailored approach to managing marketing-related vendors and payments.

Overview of Traditional Procure-to-Pay Solutions

Enterprise Resource Planning (ERP) systems like SAP and Oracle have long been the backbone of financial operations for large organizations. These comprehensive platforms aim to integrate various business processes, including procurement, accounting, and payment management. ERP systems offer robust features for handling complex supplier relationships, purchase orders, and invoicing processes. They excel at providing a centralized view of an organization's financial data and supporting compliance with accounting standards and regulations.

Similarly, AP automation tools like Tipalti and BILL have emerged to streamline the accounts payable process. These solutions focus on automating invoice processing, approval workflows, and payment execution. They aim to reduce manual data entry, minimize errors, and accelerate the payment cycle for businesses dealing with a high volume of invoices.

While these traditional solutions have their strengths, they were fundamentally designed with a different set of priorities and use cases in mind. The core architecture and workflows of these systems are optimized for:

1. Large-scale, infrequent transactions

2. Long-term supplier relationships

3. Standardized procurement processes

4. Rigid approval hierarchies

5. Detailed financial reporting and auditing

6. Onboarding suppliers who have teams used to interacting with these system

This bias towards traditional business-to-business transactions creates several pain points when applied to the world of marketing partnerships and productions with individuals ranging from influencers to creative production freelancers.

Traditional systems often require individual invoice submission, review, and approval for each transaction. For marketing teams working with dozens or hundreds of creators on a regular basis, this process becomes incredibly time-consuming and error-prone.

Challenges Faced by Modern Marketing Teams

The rise of social media, influencer marketing, and content-driven strategies has led to a proliferation of partnerships and collaborations. Modern marketing teams find themselves managing relationships with a diverse array of partners, including:

- Social media influencers

- UGC creators

- Freelancers and creatives

- Consultants and contract workers

- Event staff

- Video production teams

- Affiliates

This new reality presents several unique challenges that traditional procure-to-pay solutions struggle to address:

1. High Volume of Small Transactions: Marketing teams often work with hundreds or even thousands of partners on relatively small-scale engagements. Each of these relationships requires onboarding, contract management, and payment processing. Traditional systems, designed for fewer, larger transactions, can quickly become overwhelmed by this volume.

2. Diverse Payment Structures: Marketing partnerships often involve complex payment structures, including upfront fees, performance-based commissions, usage rights, and revenue sharing agreements. Traditional systems may lack the flexibility to accommodate these varied compensation models. Adding to the complexity is the talent management layer which requires special handling and dealing with intermediaries who may use custodial bank accounts.

3. Rapid Vendor Onboarding Requirements: Teams need to be able to quickly onboard new partners to capitalize on trending opportunities and deliver on tight campaign timelines. The lengthy vendor setup processes typical of traditional systems can be a significant bottleneck.

4. International Payments: Global marketing campaigns often involve working with partners across multiple countries. Traditional systems may struggle with efficiently handling cross-border vendor setup, payments and currency conversions.

5. Real-time Spend Visibility: Marketing teams need up-to-date insights into their spending across various campaigns and channels. Many traditional systems provide periodic financial reports to the Finance team that may not offer the granularity or timeliness required for agile marketing decision-making. It is rare that Marketing has any visibility into Finance systems and maintains an entirely separate record to track budgets and spend by campaign.

6. Compliance and Tax Management: Working with a large number of individual contractors and small businesses presents unique compliance challenges, particularly around tax reporting (e.g., 1099 forms in the US). Traditional systems may not be equipped to handle these requirements at scale.

These challenges create significant friction, leading to inefficiencies, delays, and frustrated partnerships. To understand why traditional solutions fall short in addressing these issues, let's examine their limitations in more detail.

Why Traditional Procure-to-Pay Solutions are Not the Answer

The misalignment between traditional procure-to-pay solutions and the needs of modern marketing teams stems from fundamental differences in design philosophy and technical architecture. Here's a detailed analysis of why these systems struggle to meet the demands of today's marketing landscape:

1. Rigid Vendor Onboarding Processes

Traditional ERP and AP systems typically require a comprehensive vendor setup process. This often involves collecting detailed company information, tax forms, banking details, and other documentation. While this thoroughness is appropriate for long-term, high-value supplier relationships, it becomes a significant bottleneck when dealing with numerous smaller partners.

For example, onboarding a new influencer for a one-time Instagram post promotion shouldn't require the same level of setup as bringing on a new office supply vendor. Yet, many traditional systems don't differentiate between these scenarios, leading to frustratingly long onboarding times for marketing partners.

Nick gave shared his experience with traditional systems: "The setup and support process for marketing vendors is cumbersome, often requiring hundreds of hours of administrative work and troubleshooting in systems like Ariba, Coupa, Apax Analytics, ZIP."

2. Inefficient Payment Workflows

Most traditional procure-to-pay solutions are built around a standard invoice-to-payment workflow. This typically involves:

- Receiving an invoice

- Routing it for approval

- Matching it against a purchase order

- Scheduling payment based on predetermined terms

While this process works well for regular business expenses, it's often too rigid for marketing engagements. Many marketing partnerships don't fit neatly into this model. For instance, influencer payments might be triggered by content posting or performance metrics rather than a traditional invoice.

Nick emphasized the challenges this creates: "Receiving, reviewing, and approving individual invoices is time-consuming. Marketing lacks access to finance systems and has limited control over when vendor payments are sent. Multiple employees touching payments without clear oversight exacerbates this issue."

3. Limited Integration with Marketing Tools

Traditional procure-to-pay solutions are typically designed to integrate with other finance and operations systems. However, they often lack native integrations with the tools that marketing teams use to manage their partnerships and campaigns. This disconnect creates a data silo, requiring manual data entry and reconciliation between marketing and finance systems.

For example, a marketing team might use a specialized influencer management platform to track content deliverables and performance metrics. If this platform doesn't integrate with the company's payment system, it creates extra work and increases the risk of errors when translating campaign data into payment instructions.

4. Lack of Real-time Visibility

Many traditional systems operate on batch processing models, updating financial data periodically rather than in real-time. This can leave marketing teams in the dark about the current state of their budgets and payment statuses.

Nick highlighted this issue: "It is difficult to manage budgets across multiple projects with multiple vendors, and ensure that all invoices map against purchase orders. Marketing typically does not have access to financial systems and needs to maintain a separate source of truth in spreadsheets."

This lack of visibility can lead to overspending, delayed payments, and strained relationships with independent talent and partners.

5. Complexity of International Payments

As marketing becomes increasingly global, the ability to efficiently make international payments is crucial. However, many traditional systems struggle with the complexities of cross-border transactions, including currency conversions, compliance with international banking regulations, and country-specific tax requirements.

This limitation can significantly hamper a marketing team's ability to work with international influencers, content creators, and agencies, potentially limiting the reach and effectiveness of their campaigns.

6. Scalability Challenges

While traditional ERP and AP systems are designed to handle large transaction volumes in theory, they often struggle with the unique scaling challenges presented by marketing operations. The sheer number of small, frequent transactions typical in marketing can overwhelm these systems, leading to processing delays and increased error rates.

Nick said that "AP tools were built for B2B transactions between AP and AR functions across companies. They work well for traditional supplier relationships but start to become cumbersome when supporting large numbers of freelancers due to manual support required to assist with issues during onboarding and questions about payment status."

7. Limited Support for Performance-based Payments

Many marketing partnerships involve performance-based payment models, such as affiliate commissions or bonuses based on engagement metrics. Traditional procure-to-pay solutions often lack the flexibility to automatically calculate and execute these types of variable payments. This limitation forces marketing teams to manage these calculations manually, increasing workload and the potential for errors.

8. Compliance and Tax Reporting Challenges

Managing tax compliance for a large number of individual contractors and small businesses is a significant challenge. Traditional systems may not be equipped to handle the nuances of collecting tax information, generating 1099 forms, and ensuring compliance with varying state and international tax regulations at scale.

Nick emphasized the importance of this issue: "Handling tax documentation, such as W-9s and 1099 filings, for numerous vendors can be error-prone, risky, and time consuming. During audits, this process becomes even more challenging, often leading to compliance issues."

9. User Experience and Accessibility

Traditional procure-to-pay solutions are often designed with finance professionals as the primary users. As a result, they may have complex interfaces that are challenging for marketing team members to navigate. This can lead to a reliance on finance teams for basic tasks, creating bottlenecks and frustration.

Nick noted that "Marketing typically does not have access to these systems so typically must work with finance to resolve."

10. Lack of Supplier Relationship Management Features

While traditional systems may offer some vendor management capabilities, they often lack features specifically designed to nurture the types of relationships crucial in marketing. For example, they may not provide easy ways to track content rights, manage usage terms, or facilitate communication around creative briefs and feedback.

These limitations of traditional procure-to-pay solutions create significant obstacles for marketing teams trying to operate efficiently in today's fast-paced, creator-driven landscape. The cumulative effect is a system that slows down marketing operations, increases administrative overhead, and potentially damages relationships with valuable partners.

Nick summed up the impact of dealing with support issues: "When any issue happens from vendor onboarding to late payments to receiving 1099s, vendors are frustrated and take it out on their marketing point of contact. Resolving issues takes time and involves multiple people across both marketing and finance."

The Need for a New Approach to Marketing Payments

The limitations of traditional procure-to-pay solutions in meeting the needs of modern marketing teams highlight the need for a more tailored approach. Marketing departments require a solution that can handle the volume, diversity, and speed of their partnerships while providing the control, visibility, and compliance that finance teams require.

This is where the concept of a master vendor comes into play. A master vendor solution acts as an intermediary between marketing teams and their network of external talent and partners, streamlining the entire process from onboarding to payment to tax filings. By consolidating these interactions through a single point of contact, a master vendor can address many of the challenges posed by traditional systems.

Key benefits of a master vendor approach include:

1. Simplified Onboarding: A master vendor can handle the complexities of partner onboarding, reducing the administrative burden on both marketing and finance teams.

2. Flexible Payment Models: Master vendors can accommodate various payment structures, including performance-based models, making it easier to manage diverse marketing partnerships.

3. Improved Visibility: By providing a centralized platform accessible to both marketing and finance, a master vendor solution offers real-time insights into spending and payment statuses.

4. Enhanced Compliance: Master vendors can take on the responsibility of tax documentation and reporting, ensuring compliance across a large number of partners.

5. Streamlined International Payments: With expertise in global transactions, a master vendor can simplify the process of working with international partners.

6. Integration with Marketing Tools: Master vendor solutions often offer integrations with popular marketing platforms, enabling seamless data flow between campaign management and payment processes.

Wagner highlighted the potential impact of such a solution: "A master vendor takes on and streamlines vendor setup and support, saving hundreds of hours. Working through a master vendor as a single point of contact eliminates time spent on administrative tasks."

Introducing Lumanu as the Master Vendor Solution

Lumanu offers a master vendor solution, built to tackle the intricate payment challenges that plague modern marketing teams. By positioning itself as a sophisticated intermediary between brands and their diverse array of marketing partners, Lumanu handles the entire process from initial onboarding to final payment execution. This innovative approach effectively addresses the myriad pain points associated with traditional procure-to-pay solutions, offering a streamlined, efficient alternative.

As a master vendor, Lumanu handles all vendor onboarding and tax compliance, along with a host of tailored features to the table. Fast partner onboarding reduces setup times from weeks to mere minutes, flexible payment options that support various compensation models, and gives marketing better visibility and control over the payment process. Lumanu's platform provides real-time visibility into spending and payment statuses, seamlessly integrates with marketing tools and workflows, and offers global payment capabilities, enabling brands to work effortlessly with partners worldwide. By providing a better way for Marketing to support freelancer payments, Lumanu makes the process more efficient and empowers marketing teams to focus on strategy and creativity while ensuring finance departments maintain necessary control and oversight.

The impact of implementing a master vendor solution like Lumanu can be transformative for marketing operations. Nick Wagner shared his experience after implementing Lumanu as a solution: "This is exactly what we needed. Our relationships with our creators has been enhanced because they're getting paid on time. That's the feedback that we got from Marketing which is a huge compliment coming from our Marketing teams."

Another finance leader in the entertainment industry noted the broader impact on team efficiency: "When we found Lumanu, we realized this is the solution. Marketing no longer had to deal with complaints from creators, they were able to go from campaign to campaign more smoothly, they were able to focus on the value add to the business by getting content, timely, and efficient and seamless. That's what we wanted. And that's what we got."

These testimonials highlight how a master vendor solution can address the core challenges faced by marketing teams using traditional procure-to-pay systems. By streamlining processes, improving visibility, and enhancing partner relationships, solutions like Lumanu enable marketing teams to focus on what they do best: creating impactful campaigns and driving business results.

Embracing a New Solution to Support Marketing Payments

The limitations of traditional procure-to-pay solutions in meeting the needs of modern marketing teams are clear. From rigid onboarding processes and inflexible payment workflows to lack of real-time visibility and challenges with compliance, these legacy systems are ill-equipped to handle the dynamic, high-volume nature of today's marketing partnerships.

As marketing continues to evolve, with an increasing reliance on diverse, global networks of creators and influencers, the need for a more tailored approach to managing payments becomes critical. Master vendor solutions like Lumanu offer a compelling alternative, addressing the specific pain points faced by marketing teams while providing the control and compliance required by finance departments.

By embracing this new paradigm, organizations can unlock significant efficiencies in their marketing operations. They can onboard partners faster, execute payments more flexibly, gain real-time visibility into spending, and ensure compliance at scale. Most importantly, they can foster stronger relationships with their creative partners, leading to more effective campaigns and better business outcomes.

As Nick Wagner put it: "When creators and talent managers are happy, the result is better output for the brand which leads to better content reaching your target audience. If you instead have a negative experience with creators because of payment issues, they're not inclined to work with you again. And it’s a small world, they tell their fellow TikTokers and friends not to work with you because you're bad at paying, it negatively impacts your ability to source talent."

The shift away from traditional procure-to-pay solutions towards specialized master vendor platforms represents more than just a change in technology. It's a recognition of the unique needs of modern marketing teams and the critical role that efficient, flexible payment processes play in driving marketing success.

As marketing continues to partner with freelancers to support their need for speed, organizations that adapt their payment processes to match this new reality will be better positioned to capitalize on emerging opportunities, work with top talent, and drive meaningful results through their marketing efforts. The future of marketing payments is here, and it's time for forward-thinking organizations to embrace it.